Keller, E.D.; Nguyen, Q,; Westerhoff, R.S.; Berhe, D.T.; Houghton, K.M.; Tetard, M.; Mourot, F.M.; Pastor-Paz, J. 2026 Synergies and trade-offs between carbon sequestration, water resource management and economic returns in a changing climate. Lower Hutt, NZ.: Earth Sciences New Zealand. GNS Science report 2025/24. 109 p.; doi: 10.21420/7521-8Y11
Abstract
Frequent tensions and trade-offs exist between water availability, greenhouse-gas-emissions mitigation (i.e. afforestation and/or conservation) and economic outcomes. Despite the hydrological and carbon cycles being intimately connected, carbon and water research are often done in isolation and poorly linked to resource management. Practical strategies for carbon-emissions mitigation and water management that also maintain economic value for landowners are urgently needed in our rapidly changing climate. In this study, we quantify feedbacks and interactions between climate change, carbon sequestration, water availability and economic return in Aotearoa New Zealand. We used two process-based biophysical models and a statistical economic model of profitability of rural land uses to model changes in carbon storage, plant growth, groundwater head, recharge and storage volume, and economic outcomes under selected land-use and climate-change scenarios for a case study in the Aupouri catchment in Northland, Aotearoa New Zealand. Stakeholder interviews with representatives from regional and national government were conducted to design model scenarios that address current knowledge gaps. We compared two climate-change scenarios, Representative Concentration Pathway (RCP) 4.5 and RCP 8.5, at mid-century (2041–2060) and end-century (2081–2100). Our results show an increase in plant growth and decrease in evapotranspiration in the Aupouri catchment in both scenarios and time periods due to the strong modelled CO2 fertilisation effect and increase in water-use efficiency outweighing any increase in plant water limitation. Increases are proportional to the increase in atmospheric CO2 concentrations. However, both scenarios show substantial declines in groundwater head and volume, with the most significant reductions projected under RCP 8.5 by the end of the century. Groundwater volume loss is most pronounced in high abstraction zones in the south of the Aupouri catchment. We modelled two land-use-change scenarios that involved afforestation with either exotic or indigenous trees both in the Aupouri catchment and wider Northland region on lower-productivity pasture currently used for sheep and beef farming. Our results demonstrate that afforestation with indigenous forest enhances net groundwater recharge and storage due to their deeper rooting systems and improved infiltration characteristics. However, exotic forests were more effective carbon sinks over the modelled timeframe, with higher growth rates and increased water-use efficiency. By design, our land-use-change scenarios involve afforestation of pasture, which reduces the amount of land available for pastoral agriculture (and potential farm profits) but increases carbon and groundwater storage in the region. Stakeholder interviews revealed that more information on economic trade-offs is a priority. To respond to this need, we constructed an economic model relating farm profitability to present-day pasture growth, soil moisture deficit and availability of groundwater storage to meet the soil moisture deficit. The sample size of farms in the Aupouri catchment was too small to generate significant correlations, so we could not draw conclusions around groundwater and farm profits. However, national data showed a significant positive effect between dry-matter production and pastoral farm profits, while plant water stress has a negative effect. The water-carbon impacts differ across farm systems: effects on dairy farms’ profits are immediate, whereas impacts on sheep and beef farms tend to be lagged. Our biophysical modelling projects an increase in dry-matter production under climate-change scenarios, indicating the potential for increased profit for dairy but at the expense of a decline in groundwater storage. However, climate-change impacts are likely to be complex and include other factors not modelled in this study, such as heat stress and changes in pasture species composition and nutritional value, affecting animal productivity and potentially offsetting any gains in plant growth and feed supply. Our study emphasises that local values and priorities must be taken into consideration when designing land-use management policies and incentives and regulation for climate adaptation (auths)
